Advisers struggling with amount of change

The wealth partner of a mid-tier chartered accounting firm has expressed his relief the 2017 federal budget did not contain any significant changes to the country’s retirement savings system, claiming the industry as a whole could not have properly dealt with any further reforms.

“You can only handle so much change in a system in a short space of time, so as I say thank goodness there weren’t a lot of changes around superannuation or wealth management, the space I play in, in this latest budget because that would have made it very difficult for the industry,” HLB Mann Judd Sydney head of wealth management Michael Hutton said at a recent financial services roundtable.

“I think the industry is already grappling with the changes that have been thrust upon it.”

Hutton admitted his firm was still very busy addressing the system reforms handed down in last year’s budget as the implementation date of 1 July for the changes grew closer.

“We’ve got a lot of clients with a lot of questions [about the reforms] and it’s interesting because people, not that they’re uninformed, have a misunderstanding of the thrust of a lot of the changes that are coming through on 1 July,” he revealed.

“And most people are fine with most of the changes once we’ve explained it to them as to how it actually impacts on their [situation].”

In regard to specific reforms, he pointed out the majority of the firm’s clients were still confused about the $1.6 million transfer balance cap and its multiple facets.

“{They’re confused about] what happens with the pension phase and how the accumulation phase [rollback] works. There’s that, but also what happens upon death that can become fairly complicated as well,” he said.

“The other thing [they are asking about] is the [capital gains tax relief] cost base reset. People are very [confused] as to how that works.”